American Express Company reports third quarter net income of $458 million.NEW YORK--(BUSINESS WIRE)--Oct. 28, 1996-- Board of Directors Authorizes Additional Repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of Up to 40 Million Shares -0-
(millions, except per share amounts)
Nine Months
Quarter Ended Ended
September 30 Percentage September 30 Percentage
1996 1995 Inc./ 1996 1995 Inc./
(Dec.) (Dec.)
Net Income $ 458 $ 416 10.0% $ 1,307 $ 1,179 10.8%
Per Share
Net Income $ 0.95 $ 0.83 14.5% $ 2.68 $ 2.34 14.5%
Net Revenues(a) $4,056 $4,054 - $11,982 $11,792 1.6%
Average Common
Shares Outstanding 482 497 (3.0)% 487 499 (2.6)%
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(a)Excluding the impact of the sale of AMEX Life in 1995, growth in
net revenues would have been 4 percent for the third quarter and 6
percent for the nine-month period.
American Express Company today reported third quarter net income
of $458 million, up 10 percent from a year ago.
On a per share basis, third quarter net income was $0.95,
compared with $0.83 a year ago, an increase of 14 percent.
Separately, the Board of Directors today approved a plan to
repurchase up to 40 million common shares over the next two to three
years, from time to time as market conditions allow. The plan is
primarily designed to allow the Company to offset share issuances
under employee compensation plans. Under certain conditions, the
Company may purchase additional shares in order to increase economic
value for shareholders. As of September 30, 1996, the Company had
largely completed two prior share repurchase plans totaling 60
million shares.
Travel Related Services (TRS) reported third quarter net income
of $323 million, a 9 percent increase over net income of $297 million
a year ago.
Last year's results included income from AMEX Life, a subsidiary
that was sold in October, 1995. Excluding the year ago results for
AMEX Life, TRS' net income grew approximately 13 percent, revenues
increased approximately 4 percent and expenses were up approximately
2 percent, compared with the year ago quarter.
Net revenues reflect an increase in worldwide billed business on
American Express Cards and growth in Cardmember loans outstanding.
The increase in billed business resulted from higher spending per
Cardmember, due in part to the benefits of rewards programs and
increased merchant coverage, as well as an increase in the number of
Cards outstanding. These increases were partially offset by a
decrease in net card fees, reflecting the Company's strategy of
growing its lending portfolio through the issuance of low- and no-fee
credit cards.
Credit quality has improved since last year, particularly in
Latin America. Accordingly, the provision for losses for both charge
and lending products declined significantly during the third quarter.
Management expects the amount of the fourth quarter provision to be
similar to that of the third quarter.(b)
Operating expenses increased from last year, primarily reflecting
the cost of Cardmember loyalty programs, business growth and
investment spending.
American Express Financial Advisors (AEFA) reported record third
quarter net income of $156 million, a 17 percent increase over net
income of $134 million a year ago.
Revenue and earnings growth benefited primarily from higher fee
revenues due to an increase in managed assets and growth in
distribution fees primarily from sales of mutual funds.
While sales of mutual funds, life and other insurance products
and annuities increased, sales of investment certificates declined
from last year.
(b) Important factors which may cause actual results to differ
materially from this forward looking statement include, but are not
limited to, the following: consumer and/or business spending per
Cardmember, which may result from general economic conditions
affecting consumers or businesses, including the overall levels of
consumer debt; other general economic and business conditions, such
as interest rates and consumer credit trends, which could affect the
ability of consumers and businesses to repay credit and charge card
debt to TRS; the rate of bankruptcies of consumers and businesses;
and the volume of new card products issued by TRS, which typically
involve higher provisioning. For other risk factors, see Part II,
Item 5 of American Express Company's 10-Q Report for the period ended
March 31, 1996.
American Express Bank (AEB) reported third quarter net income of
$18 million, compared with $22 million a year ago.
The decline in earnings reflects lower revenues, partly offset by
expense savings. These results also reflect the impact of the Bank's
continued efforts to focus on strategic markets and eliminate low
return activities.
Corporate and Other reported third quarter net expenses of $39
million, compared with net expenses of $37 million a year ago.
American Express Company, a global travel, financial and network
services provider founded in 1850, provides customers with a variety
of products and services consistent with its brand. The Company
provides individuals with charge and credit cards, travelers cheques
and other stored value products. It also offers financial planning,
brokerage services, mutual funds, insurance and other investment
products.
Through its family of Corporate Card services, American Express
helps companies and institutions manage their travel, entertainment
and purchasing expenses. It provides investment management services
and administers pension and other employee benefit plans. The
Company also offers accounting and tax preparation to small
businesses, and financial education services to employees at their
places of work.
As the world's largest travel agency, American Express offers
travel and related consulting services to individuals and
corporations around the globe. The Company also provides banking
services to corporations, wealthy entrepreneurs, financial
institutions and retail customers outside the United States.
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AMERICAN EXPRESS American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. COMPANY ------------------------ FINANCIAL SUMMARY ----------------- (Unaudited) (dollars in millions, except per share amounts) ----------------------------------------------- Three Months Ended September September: see month. 30, Percentage ------------------ 1996 1995 Inc/(Dec) ---- ---- --------- Revenues by Industry Segment (A) -------------------------------- Travel Related Services $2,920 $2,972 (1.8%) American Express Financial Advisors 1,021 934 9.4 American Express Bank 151 161 (6.7) ------ ------ 4,092 4,067 0.6 Corporate and Other, including adjustments and eliminations (36) (13) (c) ------- ------ CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: REVENUES (A) $4,056 $4,054 - ======= ======= - Pretax Income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. by Industry Segment ---------------------------------- Travel Related Services $441 $408 8.2% American Express Financial Advisors 230 197 16.6 American Express Bank 28 33 (16.3) ------ ----- - 699 638 9.5 Corporate and Other (78) (67)(16.1) ------ ----- - PRETAX INCOME $621 $571 8.7 ====== ====== Net Income by Industry Segment ------------------------------ Travel Related Services $323 $297 8.8% American Express Financial Advisors 156 134 16.5 American Express Bank 18 22 (18.8) ------ ------ 497 453 9.7 Corporate and Other (39) (37) (6.6) ------ ----- - NET INCOME $458 $416 10.0 ====== ====== NET INCOME PER COMMON SHARE $0.95 $0.83 14.5 ======= ======= Cash dividends declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. per common share $0.225 $0.225 ======= ======= Average shares outstanding (000's) 481,865 496,516 ======= ======= Nine Months Ended September 30, Percentage --------------- 1996 1995 Inc/(Dec) ---- ---- --------- Revenues by Industry Segment (A) -------------------------------- Travel Related Services $8,571 $8,615 (0.5%) American Express Financial Advisors 3,041 2,718 11.9 American Express Bank 435 484 (10.2) ------- ------ - 12,047 11,817 1.9 Corporate and Other,including adjustments and eliminations (65) (25) (c) ------- ------ - CONSOLIDATED REVENUES (A) $11,982 $11,792 1.6 ======= ======= Pretax Income by Industry Segment ---------------------------------- Travel Related Services $1,316 $1,208 8.9% American Express Financial Advisors 657 553 19.0 American Express Bank 79 83 (5.0) ------- ----- - 2,052 1,844 11.3 Corporate and Other (231) (203)(14.3) ------- ------ - PRETAX INCOME $1,821 $1,641 11.0 ======= ======== Net Income by Industry Segment ------------------------------ Travel Related Services $932 $859 8.5% American Express Financial Advisors 439 370 18.5 American Express Bank 51 57 (9.8) ------- ---- - 1,422 1,286 10.6 Corporate and Other (115) (107) (8.0) ------- ---- - NET INCOME $1,307 $1,179 10.8 ======= ====== NET INCOME PER COMMON SHARE $2.68 $2.34 14.5 ======= ====== Cash dividends declared per common share $0.675 $0.675 ====== ====== Average shares outstanding (000's) 486,554 499,430 ======= ======= (A) Revenue are reported net of interest expense, where applicable. (c) Denotes variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality of more than 100%. (Preliminary) Travel Related Services ----------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions) Three Months Ended September 30, Percentage ------------- 1996 1995 Inc/(Dec) ---- ---- -------- Net Revenues: Discount Revenue $1,256 $1,116 12.5% Net Card Fees 418 439 (4.6) Travel Commissions and Fees 316 316 0.1 Interest and Dividends 167 261 (36.3) Other Revenues 508 570 (10.9) --- --- 2,665 2,702 (1.4) --- --- - Lending: Finance Charge Revenue 377 396 (4.9) Interest Expense 122 126 (3.0) --- --- - Net Finance Charge Revenue 255 270 (5.7) --- --- - Total Net Revenues 2,920 2,972 (1.8) --- --- - Expenses: Marketing and Promotion 278 252 10.3 Provision for Losses and Claims: Charge Card 172 207 (16.8) Lending 107 132 (18.8) Other 28 137 (79.9) --- --- - Total 307 476 (35.4) --- --- - Interest Expense: Charge Card 175 169 3.5 Other 72 114 (36.4) --- --- - Total 247 283 (12.5) Net Discount Expense 128 101 26.5 Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. 764 700 9.1 Other Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. 755 752 0.2 Total Expenses 2,479 2,564 (3.3) ----- ----- - Pretax Income 441 408 8.2 Income Tax Provision 118 111 6.5 ----- --- - Net Income $323 $297 8.8 ===== ==== The impact on the Statement of Income related to TRS'securitized receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and loans was as follows: Increase Net Card Fees $4 - Increase Other Revenues 45 $20 Decrease Lending Finance Charge Revenue (43) - Decrease Lending Interest Expense 17 - Decrease Provision for Losses and Claims: Charge Card 51 40 Lending 11 - Decrease Interest Expense: Charge Card 43 41 Increase Net Discount Expense (128) (101) ----- --- Pretax Income $0 $0 ===== ==== -0- Travel Related Services (continued) ----------------------------------- Selected Statistical Information -------------------------------- (Unaudited) (Amounts in billions, except percentages and where indicated) Three Months Ended September 30, -------------- Percentage 1996 1995 Inc/(Dec) ---- ---- --------- ---------- Total Cards in Force (millions): United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. 28.4 25.9 9.4% Outside the United States(1) 11.9 11.5 4.1 ---- ---- Total 40.3 37.4 7.8 ==== ==== Basic Cards in Force (millions): United States 21.7 19.4 12.0 Outside the United States(1) 9.4 9.0 4.2 ---- ---- --- Total 31.1 28.4 9.5 ==== ==== === Card Billed Business: United States $32.7 $29.2 11.8 Outside the United States(1) 13.2 11.8 12.4 ---- ---- Total $45.9 $41.0 12.0 ==== ===== ==== Owned and Managed Cardmember Receivables (excluding Revolving Card Products): Total Cardmember Receivables $20.7 $18.7 10.5 90 Days Past Due as a % of Total Cardmember Receivables 3.6% 3.6% - Total Loss Reserves (millions) $996 $915 8.8 % of Cardmember Receivables 4.8% 4.9% - % of 90 Days Past Due 134% 135% - Cardmember Receivables Loss Ratio, Net of Recoveries 0.54% 0.52% - Owned and Managed U.S. Cardmember Lending (including Revolving Card Products): Total Cardmember Loans $11.2 $9.0 24.2 30 Days Past Due as a % of Total Cardmember Loans 3.2% 3.5% - Total Loss Reserves (millions) $427 $389 9.8 % of Cardmember Loans 3.8% 4.3% - % of 30 Days Past Due 119% 122% - Write-Off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. Rates 5.1% 4.5% - Travelers Cheque Sales $8.6 $8.3 3.2 Average Travelers Cheques Outstanding $6.6 $6.7 (1.8) Travel Sales $3.8 $3.7 4.1 Return on Average Equity (2) 25.1% 24.6% - (1) Both years include Cards issued by strategic alliance partners and independent operators as well as business billed on those Cards. (2) ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. is calculated excluding the effect of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 115. Note: Certain prior year amounts have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current year's presentation. -0- (Preliminary) American Express Financial Advisors ----------------------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions, except where indicated) Three Months Ended September 30, ----------------- Percentage 1996 1995 Inc/(Dec) ---- ---- --------- Revenues: Investment Income $560 $555 0.9% Management and Distribution Fees 302 241 25.4 Other Income 159 138 15.5 --- --- ---- Total Revenues 1,021 934 9.4 ----- --- --- Expenses: Provision for Losses and Benefits: Annuities 303 293 3.7 Insurance 102 99 2.8 Investment Certificates 45 55 (17.2) -- -- ------ Total 450 447 0.9 Human Resources 259 226 14.4 Other Operating Expenses 82 64 28.3 -- -- ---- Total Expenses 791 737 7.5 --- --- ---- Pretax Income 230 197 16.6 Income Tax Provision 74 63 16.6 --- --- ---- Net Income $156 $134 16.5 ==== ==== ==== Selected Statistical Information -------------------------------- Life Insurance in Force (billions) $65.2 $57.6 13.2 ===== ===== Assets Owned and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. Managed (billions): Assets managed for institutions $35.8 $32.3 10.9 Assets owned and managed for individuals: Owned Assets 50.8 46.2 9.9 Managed Assets 56.3 46.3 21.6 ---- ---- ---- Total $142.9 $124.8 14.5 ====== ====== Sales of Selected Products: Mutual Funds $3,313 $2,584 28.2 Annuities $946 $699 35.3 Investment Certificates $182 $363 (49.9) Life and Other Insurance Sales $109 $94 16.2 Number of Financial Advisors 8,092 7,930 2.0 Fees From Financial Plans (thousands) $11,660 $9,798 19.0 Product Sales Generated from Financial Plans as a Percentage of Total Sales 64.7% 65.3% - Return on Average Equity(1) 20.2% 19.2% - (1) ROE is calculated excluding the effect of SFAS No. 115. -0- (Preliminary) American Express Bank --------------------- Statement of Income ------------------- (Unaudited) (Dollars in millions) Three Months Ended September 30, Percentage --------------- 1996 1995 Inc/(Dec) ----- ---- --------- Net Revenues: Interest Income $206 $221 (6.9%) Interest Expense 128 140 (8.4) --- ---- ------ Net Interest Income 78 81 (4.3) Commissions, Fees and Other Revenues 57 59 (4.8) Foreign Exchange Income 16 21 (21.7) -- -- ------ Total Net Revenues 151 161 (6.7) --- --- ------ Provision for Credit Losses 5 1 (d) --- --- ------ Expenses: Human Resources 59 62 (5.0) Other Operating Expenses 59 65 (9.2) -- -- ----- Total Expenses 118 127 (7.1) --- --- ----- Pretax Income 28 33 (16.3) Income Tax Provision 10 11 (11.6) --- -- ------ Net Income $18 $22 (18.8) === === ====== Selected Statistical Information -------------------------------- Return on Average Assets 0.62% 0.68% - Return on Average Common Equity(1) 9.61% 11.28% - Total Loans $5,640 $5,383 4.8 Reserve for Credit Losses $116 $115 0.7 Total Nonperforming Loans $31 $32 (2.8) Other Real Estate Owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most $34 $43 (20.6) Risk-Based Capital Ratios Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. : Tier 1 9.0% 8.7% - Total 12.8% 13.9% - Leverage Ratio 6.0% 5.6% - (d) Denotes variance of more than 100%. (1) ROE is calculated excluding the effect of SFAS No. 115. CONTACT: Susan SUSAN Smallest Univalue Segment Assimilating Nucleus SUSAN Sub Saharan African Network SUSAN Smart Ultrasonic System for Aircraft NDE D. Miller 212/640-4953 or Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. J. O'Neill 212/640-5951 |
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